Do you look at the major currency pairs before you trade the crosspair?
If not this could be a reason why you have limited success on them.
Watch the video to find out more…
Today, we’ll discuss one of the requests from our comments, which is to look at the AUD/CAD.
Currency strength meter
Before we dive in, I wanted to look at the Currency strength meter to see what other currencies were up to and if there was an edge on AUD/CAD.
In our recent YouTube video, we had a question regarding AUD/CAD. Before we take a look at the currency pair, it is important to understand why the market moves in the first place.
The strength meter shows us that the AU Dollar (grey line) is below the CA Dollar (green line), showing us that the AUD/CAD should be trending down.
The grey line is the AU Dollar while the green line is the CA Dollar, and they have crossed over with the CA Dollar strength. The Aussie has been moving down for quite some time, so I like the opportunity to sell it, especially against the CA Dollar.
The first chart I’m going to look at is AUD/USD because if we’re going to trade AUD/CAD, then we are essentially trading the AUD/USD versus the USD/CAD.
If I want AUD/CAD to move lower, then I need to see the AUD/USD move lower and USD/CAD either move sideways or move lower as well.
I want the AU Dollar to weaken and the CA Dollar to gain strength. I want both of these currency pairs moving lower.
When looking to trade a crosspair, we need to understand what markets we are trading against each other. For this case, we want to trade AUD/CAD so we need to understand where AUD/USD and USD/CAD are. This is because we need to see the AUD/USD move lower and the USD/CAD either range or move lower.
The four-hour at AUD/USD is in a range at the moment.
We recently went up to 0.78, but every time it got to the highest level, we rejected it and moved lower. Now, we’re trying to break through this significant low at 0.7690.
We’re failing to break the low that the market is holding. However, if the AU Dollar weakness continues, then we should expect a break out of the lows and a potential continuation down.
Alternatively, we need to see the price break out of the range to be on the selling side in AUD/CAD.
The AUD/USD price is currently ranging between 0.7800 and 0.7700. If we are looking for Aussie weakness, then we need to see the price break through the range lows and trade lower.
We were looking for the USD/CAD price to go back up to the high volume level at 123.95. Now, the price is trying to break above the highs at 123.20 but it’s rejecting.
If price were to continue to show a bearish price action, then we could look for some downside. It would be ideal for the USD/CAD to go back to the high volume level because it’s a level of resistance.
If we’re looking to buy the CA Dollar, then we want to be buying it from these key areas. So, if I wanted to be a seller, then I would like to sell when the USD/CAD hits 123.95, and when the AUD/USD price breaks out of the range and retests.
AUD/CAD is forming a bearish candlestick in the daily timeframe. It’s showing us that the AU Dollar moved overnight.
The 95.45 level on AUD/CAD coincides with the USD/CAD because this would be the area where sellers could re-enter the market.
Also, if USD/CAD reaches a high volume level, then we’ll probably see a CA Dollar sell-off before the market comes in.
When we look at the AUD/USD and USD/CAD prices, we can see that the market may pullback first before an opportunity arises. Looking at the AUD/CAD price, we can see that the market recently formed a consolidation and a breakout. There is a high volume level at 0.9545, which would be the most ideal place to get short in the market.
I’d like to be on the short side of AUD/CAD at 95.45. But, that doesn’t mean that the price will go back to that level. However, there is a high probability that if price goes back to this area, then we could see a continuation of the overall downtrend.
Some alternative entry targets would be the 93.45 or 93.50 area because there was a bit of demand there that is untested. So, I would really like to see a consolidation pullback continuation to the downside on AUD/CAD.
You can try trading with the AUD/CAD pair with as low as $100 when you open a live account with Blueberry Markets. Fast execution, zero commission foreign exchange, and prompt support – that’s the Blueberry Markets experience.